Sunday, July 5, 1998 Last modified at 1:30 a.m. on Sunday, July 5, 1998

Council members expect to avoid city tax increase for 1999

By MIKE W. THOMAS

Avalanche-Journal

A tax increase is unlikely to come out of budget talks getting under way this week at City Hall, according to several City Council members.

Even without a tax increase, there may be a few extra dollars to pass around because of higher property valuations and rising sales tax revenues.

''Obviously, there won't be a tax increase,'' said Councilman Alex ''Ty'' Cooke. ''We would even like to do a small tax decrease, but that may not be feasible.''

''I think that a tax increase is not likely,'' agreed Councilman Max Ince. ''I don't see anything at this point that would require an increase and I don't foresee that happening.''

Much still depends on this year's cotton crop and its effect on consumer spending. The city's primary sources of revenue for the general fund are sales taxes and property taxes.

Sales tax revenues this year are slightly above city estimates so far, but no one knows how they will do the rest of the year.

The city collected $24.3 million in sales taxes during the 1996-97 fiscal year and budgeted $24.2 million for 1997-98. The city has collected $14.6 million in sales taxes through April of this year, about half a million more than had been collected at the same time last year.

Property tax revenues could also be up this year because of the addition of $111 million of new taxable property on the city's tax rolls, according to estimates from the Lubbock Central Appraisal District.

The city's total property tax base could top $6 billion for the first time, according to a letter to City Manager Bob Cass from chief appraiser Dave Kimbrough. But the final figure is still subject to appeal and won't be finalized until later this month.

Cass said the city is in good financial condition, but added that department heads are still being asked to find areas to reduce costs.

There is always a greater demand for services than can be provided and a desire on the part of department heads to meet those needs, Cass said.

''Obviously, we can't meet all of those needs,'' Cass said. ''Early on, I sent a signal to folks that they should not expect a radical increase in (tax) rates. So most did a good job of coming forward with conservative figures (in their budget requests.)''

Cass will make a formal presentation to City Council members on the city staff's budget requests on Wednesday beginning at 8 a.m. in council chambers at 1625 13th St.

While next year's budget prospects look good right now, it could all change if the cotton crop fares poorly, Cooke said. Also, if the closing of Texas Instruments is not countered quickly by new economic development, the prospects for next year could be even worse.

''If we don't have some economic development, we are going to have some big problems,'' Cooke said. ''We could probably do a small tax decrease, but I'm not sure it would be the responsible thing to do. We need the extra money on the economic development front.''

Officials with Market Lubbock Inc., the city entity charged with promoting economic development, have said they need more money for business incentives to keep Lubbock competitive with other cities trying to lure new jobs.

Ince said he is aware that Market Lubbock's incentive funds are running short, but added that he will have to wait and see a specific request and balance it with needs in other departments.

''There are always more demands than there is money,'' he said.

Councilman David Nelson said he wants to consult with members of the economic development task force before deciding on what to do about providing more funds for incentives.

''At this point it is up in the air,'' Nelson said. ''We certainly want to make our decision with their input in mind.''

Another area that can probably expect some extra funding is law enforcement and, in particular, police salaries. Mayor Windy Sitton made raising police salaries a key component of her recent re-election campaign, and City Manager Bob Cass said it's an area the city hopes to address more aggressively in the future.

''But it may take two or more years with existing revenue streams,'' he cautioned.

While figured separately from the general fund, another big part of the budget process involves the enterprise funds. These include the electric and water utilities, sewer and solid waste collection, stormwater drainage, transit services and Lubbock International Airport.

Each one is funded by usage fees rather than tax dollars and growth is also determined by the amount of usage.

This year the electric fund and especially the water fund have seen big increases in revenue brought on largely by the dry weather conditions. However, city officials note that if the area has more rain next year these figures would decline correspondingly.